Call To Let Whistle-Blowers Stop Pension Scams

Finance professionals urging new laws to protect retirement savers from pension scams.

The Pensions and Lifetime Savings Association (PLSA) wants closer scrutiny of pensions schemes with fewer than 100 members.

The trade body argues that scams are more likely to take place in smaller schemes.

Appointing an independent trustee with the job of whistle-blowing if they spot a suspect fraud is one way of minimising the risk of crooks making off with someone’s pension cash, says the organisation.

The trustee should be a lawyer, accountant or pension professional with no connection to the pension provider.

Fraudsters are threat to saving

The PLSA is concerned that small self-administered schemes (SASS) and offshore pensions are targets for scammers as they are generally smaller set-ups with no more than a handful of members.

The best way to make sure the measure works, says the PLSA, would be to pass a law stopping any pension below the 100-member cap from accepting transfers in if an outside trustee has not been appointed.

Graham Vidler, the PLSA director of external affairs said: “Pension schemes see scams as a major and increasing threat to their members’ retirement savings. We welcome the government’s commitment to tackle the issue but a much more ambitious approach is needed.

“A completely new authorisation regime for pension schemes will offer savers robust protection from scammers who have been able to set up pension scam vehicles too easily in the past.

Stopping the scammers

“The nature of the regime will depend on the risks presented, but we should start by introducing authorisation for the schemes with the greatest risks, such as smaller schemes and SSAS.”

The PLSA is a leading financial trade body representing more than 1,300 pension schemes with 20 million members and more than £1 trillion in assets.

The proposal is part of the PLSA submission to a government consultation looking at ways to stop pension scammers from contacting savers by phone, email and text.

“Pension scams can cost people their life savings, and leave people facing retirement with limited income, and little or no opportunity to build their pension savings back up,” says the consultation.

“The government is committed to protecting people from pension scams; and pursuing those who perpetuate pension scams wherever possible.”

Below is a list of some related articles, guides and insights that you may find of interest.

Questions or Comments?

We love to get feedback from our readers. So, after reading this article, if you have any questions or want to make comments, send us a message on this site or our social media?

Don’t forget that you can also request the guides sent directly to your email inbox.

Leave a comment